Bond Oversight Group Never Made Operational – No Audit or Reports in 2.5 years

By Richard Hoegh, Patric Hedlund and Gary Meyer

The Mountain Enterprise has confirmed that the committee of citizens who were appointed to oversee the $7.12 million school bond fund and report to the public about the spending of the money has not made any of the reports required by law in the two and one-half years since its appointment in June 2006.

The terms of the people appointed to the School Bond Oversight Committee expired over seven months ago. Two members don’t live here anymore. No new committee has been appointed.

On November 8, 2005 voters approved a school bond to raise money to replace aging portable classrooms with permanent structures in El Tejon Unified School District (ETUSD).

Before the election, voters were told by former Superintendent John Wight and others close to the district that they would “double their money” with state matching funds. Voters were told the bond would replace over 50 percent of the current classrooms in the district and build a multifunction room at Frazier Park School. None of that was true.

Every property owner within the ETUSD is now paying on the $7.12 million bond plus interest, and will continue paying through the year 2027. The interest rate on the bonds for 2007 through 2013 is ten (10) percent. It declines in subsequent years, but total cost will be more than $11,742,000.

The citizens’ oversight group that state law requires to monitor the bond has never seen an annual bond audit from the district—and neither has the Board of Trustees.

The California Education Code requires at least seven members on the oversight committee. The code requires that one member be active in a taxpayer association. The committee never had such a member. The school board appointed members Michael Kanke, Caleb Kanke, Holly Matthews, Lucy Triance, Randy Tominaga, Patricia Smith and Craig Stowell for two-year terms. Of the original seven, two moved away and one resigned. The terms for the rest expired in June 2008. Their written reports, which California law requires to be presented at an open public meeting and published by the school board on the internet, have never been prepared.

Interviews of the available committee members on January 10, 11 and 12 showed that the committee had done nothing other than attend a single meeting two and one-half years ago with ETUSD Superintendent Shelly Mason and architect Anthony Palazzo.

The members who were able to attend said they received no instruction or written materials outlining their responsibility. No schedule of subsequent meetings was established. To date, they have not received any audit of the bond fund or information as to their function or duties at any other time, they said.

The Bond Oversight Committee is set up under the California statutes as an independent body and is supposed to proactively seek their information on behalf of the public. That has not happened.

Committee member Craig Stowell put it this way, “I was not at the first meeting but I heard from another member that the architect said he would have to go back to the drawing board on the design. Other than that I have heard nothing.” Committee member Randy Tominaga confirmed, “Nobody knew what was going on.” Member Patricia “Patti” Smith moved away to Northern California almost two years ago. Member Lucy Triance has moved to the Los Angeles area, although she says she still owns property here and would attend a meeting if one was ever convened.

In performing those functions, the code makes review copies of annual audited performance reports and annual audited financial reports available to the committee.

The Mountain Enterprise has learned that these reports have not been prepared and do not exist. When asked formally for the reports, Superintendent Shelly Mason replied that an audit will be available “in a couple of weeks.” She said that the bond was included in the overall district audit and she thought that was sufficient.

In an interview with the district’s financial services manager on Tuesday, Jan. 20, Terri Geivet said, “At this point we’ve only spent money on the architect and maybe one geotech firm. Maybe there was some confusion. I thought that when the district auditor did our overall audit, that that met the requirement of the bond. But maybe we misunderstood that, so we are calling [the auditor] back and asking for a separate audit for the bond so we can call them [the Bond Oversight Committee] together and say, ‘See… So there you go…you have your meeting, you have your audit, and everything is out front.’”

Geivet said Nancy Roberts of the Bakersfield firm Roberts and James had been asked to provide the bond audit.

School Bond Activity

According to Geivet, on January 4, 2007 a Master Plan and Predesign phase contract was signed with the firm Phillips, Metsch Sweeney, Moore for $68,750. The original contract proposal was for $89,000, but Trustee Anita Anderson challenged elements of the contract, leading the superintendent to check with the district’s legal firm, which confirmed that there should be modifications, shaving $19,250 from the cost.

The Master Plan was submitted to the board on June 2007. No mention was made in that document of the need to plan ahead for challenges related to El Tejon School being immediately adjacent to Interstate 5, the primary cargo-artery connecting Northern and Southern California. Big rig diesel traffic— and accidents—are steadily increasing. Twice this past year accidents have involved trucks carrying toxic chemicals. Fortunately, neither of those containers ruptured, but one involved 27 cars and injured 11 people. California’s State Superintendent of Education has issued warnings about building schools close to freeways due to the effect of emissions on children’s developing lungs.

“We had to have a Master Plan to get matching funds from the state,” a source within the district said, implying that the $69,750 master plan for the future of ETUSD was not intended to look at the challenges the district may have to confront in the not-too-distant future.

A Contract for “schematic design phase one” was signed by Superintendent Mason on November 14, 2007 for $191,000.

Questions on ‘Lost Funds’

Interim Superintendent John Lindsay told the board back in October, 2006, “about $236,000 in architects fees and $60,000 in state fees for plan review” had already been expended when Wight abruptly left; “If the district does not complete its plan for the other relocatables… it will need to walk away from about $250,000,” in addition to incurring “at least $350,000 in new architect’s fees for sitebuilt structures.”

The Mountain Enterprise asked Superintendent Shelly Mason to shed some light on Lindsay’s numbers. She said “$58,403 was paid in architectural fees for the El Tejon Continuation High School,” by the time John Wight left.

That still leaves questions regarding $178,000 of the money Lindsay’s said would be lost.

His $60,000 figure for the state architect’s review roughly matches Mason’s report that $54,354 in state fees had been returned to ETUSD after Wight’s plans were abandoned and $6,509 was kept by the state in relation to the continuation high school, which was completed.

New Expenditures

On January 14 the Board of Trustees voted for a design and engineering contract costing $532,900 for Frazier Park School and $394,200 for adding a wing of elementary classrooms to El Tejon School, totaling $927,100.

That would mean that about $1.12 million has now been committed to the new architect Phillips, Metsch, Sweeney, Moore.

Oversight Committee Role

If a Bond Oversight Committee were functioning in accord with state law, it could have produced two reports for the public by now to eliminate confusion about how the bond fund has been used.

Its jurisdiction extends to reviewing the district’s cost-saving measures and expenditures. According to state law, these include reducing professional fees (such as those of the architects), reducing the cost of site preparation, reducing costs by joint use of core facilities, reducing [energy] cost by efficient school site design (which would include heating, cooling and perhaps air purifying equipment), selection of insulating material and schoolroom orientation.

At the January 14 school board meeting, one trustee asked questions regarding such concerns. Trustee Anderson asked Architect Anthony Palazzo about energy efficiency, insulation, alternative energy source savings and walkway surfaces. Trustees Paula Regan, Cathy Wallace and Superintendent Mason appeared to be whispering among themselves, not participating in the public questions and answers. Community members Max Williams, Bradford Oliver and two reporters for The Mountain Enterprise also asked questions.

The Bond Oversight Committee has had no chance to review costs incurred to date, or to review efficiency efforts. At the January 14 school board meeting architect Palazzo outlined an extensive list of things yet to be done before actual construction can begin. No independent citizens’ committee is in position to report to the public whether that list is appropriate.

Palazzo’s proposal says by April 2010 his firm anticipates having plans and permits. He told the trustees that building may start that summer.

Timeline of Significant School Bond Events

Fall, 2005 Superintendent John Wight promotes School Bond Measure E to numerous community groups by saying the state would match the bond amount “two to one.” He then revised the figure down to “one to one.”

November 8, 2005 Voters approve a school bond with a face value of $7,120,000. With interest, that is a $11,742,638 debt.

January 2006The Mountain Enterprise publishes a call for Bond Oversight Committee members and a description of committee duties (see text boxed below).

ETUSD Seeking Applicants for Citizen’s Bond Oversight Committee

Following the passage of Bond Measure E, the El Tejon Unified School District is seeking applications for appointments to the Citizen’s Bond Oversight Committee. Members are needed to represent (1) a taxpayer’s organization, and (2) the students of ETUSD. The application deadline is 3:30p.m., January 26, 2006. To qualify for appointment, the applicant: (a) must be at least 18 years of age; (b) must not be an employee or official of the District; and (c) must not be a vendor, contractor, or consultant of the District. A screening committee will review all applications and recommend candidates to the Board of Trustees. Applications may be obtained from the Superintendent’s Office by calling (661) 248-6247, and the ETUSD website: http://www.el-tejon.k12.ca.us/

Citizen’s Bond Oversight Committee

The Citizens’ Bond Oversight Committee was established in 2006, pursuant to state laws, to oversee the implementation of Measure E, a $7 million dollar bond that was approved by the ETUSD voters in November, 2005. The Committee meets quarterly (April, July, October, and January) and reviews quarterly expenditure reports produced by the District to ensure that (a) bond proceeds are expended only for the purposes set forth in the ballot measure; (b) no bond proceeds are used for any teacher or administrative salaries or other operating expenses; (c) bond proceeds are maximized.

May 31, 2006 Superintendent John Wight abruptly resigns.

June 2006 Bonds sold to finance rebuilding 57% of the district’s classrooms.

June 14, 2006 The school board appoints a sevenmember Bond Oversight Committee. The members were Michael Kanke, Caleb Kanke, Holly Matthews, Lucy Triance, Randy Tominaga, Patricia Smith, Craig Stowell. Matthews resigned; Smith and Triance moved to other parts of the state.

June 16, 2006 Detective’s Preliminary Report says a possible private link between JTS Modular, the architect and personal associates of John Wight needs to be investigated further. Final report never released to public.

September 2006 ETUSD Trustees learn ballot language written by Wight for the bond does not match contracts with JTS Modular Construction that were passed by school board.

October 5, 2006 Interim Supt. John Lindsay tells board “about $236,000 in architects fees and $60,000 in state fees for plan review” had already been expended when Wight abruptly left and an audit revealed the magnitude of the error. “If the district does not complete its plan for the other relocatables however…it will need to walk away from about $250,000,” and will incur “at least $350,000 in new architect’s fees for site-built structures,” Lindsay said. See story for information about discrepancies. Board also told 33 cents to the dollar is best case scenario for state matching funds.

October 5, 2006 Board told it may go to court to seek a judicial directive to allow the district to proceed with the relocatable construction.

October 11, 2006 School board informed that Bond Oversight Committee does not include a member from a taxpayer association as required by California law. No action taken.

November 2006 Board votes to abandon plan for cost-shaving modular structures; votes to construct only “stick built permanent classrooms on site,” estimated to reduce the number of classrooms to be built to about 30% of former expectations, which could be as few as 17% of those that need to be replaced.

January 4, 2007 Master Plan and Predesign phase contract was signed with the firm Phillips, Metsch Sweeney, Moore for $68,750.

March 14, 2007 The school board appoints bond committee member Craig Stowell to newly-formed Architectural Steering Committee. Stowell does not recall notification of this and was not asked to attend any meetings, he said in a January 2009 interview.

March 14, 2007 The school board warned by new architect that delays are costly; told construction costs were rising at 8 percent yearly.

September 18, 2007The Mountain Enterprise asks in a report: “What about that Bond Oversight Committee?”

September 18, 2007 Superintendent Shelly Mason says in telephone interview, “Nothing is going on and so there is no need to call a meeting [of the oversight committee.]”

Fall, 2007 The school board authorizes paying the architects $191,000.

September 2008 Architects meet with the school board and school principals to review preliminary plans and drawings.

January 14, 2009 Board approves a design and engineering contract to architects for $927,100. An estimate is made that construction may begin in summer of 2010 and be completed sometime in the year 2011. No Citizens’ Bond Oversight Committee report issued in 2.5 years.